Alabama has an equitable distribution statute that affects property division matters when couples divorce. As is the case in many other jurisdictions, the goal is to establish a just and fair solution based on the totality of marital circumstances.
Some couples with complex marital estates have already established standards for property division. Prenuptial agreements can outline exactly how spouses intend to split up their property when they divorce. The majority of couples do not have contracts in place discussing property division. Instead, they have to negotiate such issues as they prepare for divorce.
Spouses who have secured a comfortable standard of living during the marriage and who have a variety of resources to divide have more reason to worry about financial misconduct as they navigate the divorce process. One spouse who does not want to share marital property with the other may intentionally try to reduce the overall value of the marital estate through dissipation.
What activities constitute dissipation?
The dissipation of marital property can look vastly different from one case to another. Frequently, dissipation involves wasteful, inappropriate spending. One spouse empties out financial accounts on shopping sprees or paying for spa days. They might also rack up credit card debts on marital accounts engaging in similar behavior. Wasteful spending is a common form of dissipation.
Dissipation can also involve the destruction of marital property. One spouse setting fire to the other’s wardrobe, donating all of the household furnishings to a local charity or smashing up their car with a baseball bat could constitute dissipation.
Some people even try selling marital property at below-market prices as a way of diminishing the marital estate and punishing a spouse. The use of marital property to conduct an extramarital affair can also constitute dissipation of marital property.
Why dissipation matters
Securing a fair or equitable property division outcome requires a thorough review of financial circumstances. In cases where one spouse wasted money or destroyed resources so that they shared less property with their spouse, the courts can account for that misconduct when dividing their property.
It may be necessary to bring in a forensic accountant in some cases, as these professionals can help find evidence of dissipation and quantify the overall financial impact of that inappropriate economic behavior. In cases involving litigated property division proceedings, proof of prior dissipation can help one spouse hold the other accountable for their irresponsible and destructive behavior.
Learning about the types of misconduct that can actually have an impact on divorce outcomes can be beneficial for those preparing for complex, high-asset divorces. Dissipation can theoretically influence how a judge handles economic matters in a divorce.
